Neoliberal pendulum can only swing back

Lurch to the neoliberal right

I can’t help it to have the benefit of knowledge and experience, which only comes with age. Unlike everybody under 50 who grew up under the intense ‘greed is good’ indoctrination of the neoliberal Reagan/Thatcher/Rogernomics era I actually remember that – contrary to what we were told – there was and is an alternative.

Bryan Gould in an excellent piece tells the story I experienced since my arrival in New Zealand in 1984.“Most of those of middle age or younger will have grown up in a world where it has been widely accepted that markets are more or less infallible, that government spending is inevitably wasteful and a drag on economic development, that running a country is just like running a business, that we all benefit if the rich get richer, and that private profit justifiably and inevitably overrides all other considerations.One of the most significant consequences of this re-definition of the political landscape has been the acceptance that what would once have been regarded as at the extreme outer edge of what is politically possible is now the new centre ground. Any divergence from this central position is, by definition therefore, literally eccentric; and any move away from “free-market” orthodoxy is condemned as either a return to the past or an irrational lurch leftwards.”

We have forgotten how extreme by historical standards this new ‘centre’ ground really is.

I remember Berkley in 1969 when Ronald Reagan was governor of California. If we wanted a fun night out we went to the pictures to see old movies with B-list actor Reagan in it. They were screened just for us students to vent our anger at his defunding policies towards one of the world’s leading Universities. We always were armed with rattles and whistles and other noisy instruments to make a racket whenever Reagan appeared. If anybody would have told us that Reagan would within a decade become US president we would have declared the person insane.
He would not only become president but give a whole era his name. The ground had shifted.

Neoliberal juggernaut running out of steam

Today there are signs that people actually don’t believe the dogmatic neoliberal rhetoric anymore. After the global financial and economic crisis in 2007/8 people being at first dazed and confused now realise that they had witnessed the collapse of the edifice of neoliberal dogma. Capitalism had to be saved by socialism. The rich had pocketed the profits (and bonuses) and the losses had to be socialised by government bailouts paid for by the poor. You don’t find that recipe in any neoliberal economic textbook.

One of many examples around the world of people waking up to this reality just plays out in the UK where the Labour Party is holding its most democratic leadership contest ever and low and behold the ‘left wing’ candidate Jeremy Corbyn is leading the pack by a country mile.Corbyn’s campaign has been unique in the Labour leadership campaign in actually offering coherent policies and a fleshed-out economic strategy: a radical housing programme; tax justice; democratic public ownership of utilities and services; a public investment bank to transform the economy; quantitative easing to invest in desperately needed infrastructure; a £10 minimum wage; a National Education Service; a costed abolition of tuition fees; women’s rights; and so on (Owen Jones in the Guardian).

Even a leading Tory minister said that Mr Corbyn’s populist left-wing policies could prove difficult to beat.

Savage backlash from the right in politics and media

The proponents of neoliberal dogma in politics and corporate media are going ballistic. They are running scared that we, treated as and called children for so long, finally do the childish thing and point out that the neoliberal emperor wears no cloths.
The reaction of the right in Labour and the media was savage. Calling Corbyn supporters “morons” is par for the cause and Tony Blair topped it off by saying “that if your heart is telling you to vote for Corbyn, you need a heart transplant.”

In little New Zealand our ‘little’ political commentators in the mainstream media are also living in a parallel world by accusing their opponent of living in a time warp.
Case in point John Armstrong in a recent opinion piece in the NZ Herald.
A party critical of current government policies is “marooned in a time bubble of the economic boom of the 1950s…. Its unwillingness to confront that myth of a better past will ultimately be the death of it…. The party seemed more intent on swimming against the prevailing political currents, seemingly as much for the sake of being seen to be different from its competitors as upholding its core principles… Times have moved on.”

For the neoliberal prophets events in the past like the crash in 1929 and the New Deal in the US to fix it and the post WWII economic policies leading to the boom of the 1950s are reduced to mere myths. Any evidence of the alternative must be wiped from our memory bank. Any political party’s unwillingness to confront that myth of a better past will ultimately be the death of it as those who lived through those times and who gain comforting reassurance from (it) pass away (Armstrong).It looks that he can’t wait for me/us to die as if the historic evidence would die with us.

For the proponents of the current economic system the global financial and economic crisis of 2007/8 and all crises preceding it seem also to be just myths not to worry about. That is the cloud cuckoo land they live in. Reality does not exist only ideology.

Back to Gould :“That may be about to change. As the tide of ‘free market” orthodoxy has reached its high-water mark and appears to be receding (at least in most parts of the western world other than the euro zone), it is more and more likely to leave exposed to public view those new policy initiatives that seem to have little to do with common sense and practicality and to reflect much more clearly what are doctrinaire preoccupations.Consider the following recent instances.The government’s ideological preference for private over public provision has led them to engage Serco – an international firm already notorious for its failures in a range of countries – to run some of our prisons. The outcome? The shambles – and the unacceptable and damaging shambles at that – now revealed at Mt Eden prison. Charter schools? An idea that has already been shown in its country of origin, Sweden, to produce disastrous results in terms of educational standards, and is now in the process of proving that point all over again in New Zealand, at the expense of some of our most needy and disadvantaged children.And what about the wacky idea of financing the delivery of social services to some of our most vulnerable citizens, including the mentally ill, by sellingbonds to private investors who will then expect to make a profit from their “investment”?The usual view of the left as doctrinaire and the right as pragmatic is changing. It is now the right that espouses the ideological approach and that will go on doing so for as long as it is not held to account and its bluff is not called. Guy Body / NZ Herald

The left has the opportunity to offer new alternatives to free-market orthodoxy that are not the product of doctrine, but are simply sensible and will produce better outcomes.”

I couldn’t agree more. The pendulum had reached it’s furthest point and can go only one way, which is swing back.